Frequently Asked Questions

What is a reit ?

REIT = Real Estate Investment Trust

A REIT is very much like a mutual fund, except instead of investing in various stock, bonds and financial products. A REIT invests in Properties, Mortgages, and Real Estate products. The REIT professionally manages the Real Estate products with a focus on stable cash flow and future capital growth. Typically Distributing the cash flow from these products directly to the Unitholders on a regular basis. Viocity REIT's focus is on multi-family residential rental properties and mortgage investments.

what is an emd ?

EMD = Exempt Market Dealer

An Exempt Market Dealer (EMD) are security dealers registered under provincial securities legislation in one or more jurisdictions in Canada. They are a specific securities dealer dedicated to marketing and selling Exempt Market Product (EMP's - See Next FAQ) securities. Viocity Management Inc. (VMI) is the primary Exempt Market Dealer for Viocity REIT units. In Accordance with securities law, VMI's team is comprised of registered Dealing Representatives (DR), a Chief Compliance Officer (CCO), and an Ultimate Designated Person (UDP).

What is an EMP ?

EMP = Exempt Market Product

An Exempt Market Product (EMP), also occasionally referred to as exempt securities, are investment products that are distributed under prospectus exemptions. Investors who wish to invest in an exempt market product must qualify to do so under specific exemptions (see next FAQ). Exempt Market Products can only be sold through Exempt Market Dealers, and they are not publicly traded on any exchanges, nor are there any other secondary markets for these products.

Do I qualify to invest in viocity reit ?

Because Viocity REIT doesn't file a prospectus with the governing bodies and is not a publicly traded REIT, Unit of Viocity REIT are distributed using exemptions available under the securities laws for exempt products. The most common exemptions Viocity REIT investors qualify under are the "Accredited Investor Exemption", and the "Offering Memorandum (OM) Exemption". Please see next FAQ's for more details.

What is an accredited investor ?

An Accredited Investor can have several different definitions, however the most common criteria used to define an Accredited Investor in Canada as they apply to purchasing Viocity REIT units is as follows:

a.) An individual who's NET income was more than $200,000 in each of the 2 most recent calendar years, and you expect it to be more than $200,000 in the current calendar year.

b.) Your NET income combined with your spouse's NET income was more than $300,000 in each of the 2 most recent calendar years, and you expect it to be more than $300,000 in the current calendar year.

c.) Either alone or with your spouse, you own more than $1,000,000 in NET financial assets* (Cash, Securities, contract of Insurance) less liabilities against these assets.

d.) Either alone or with your spouse, you own more than $5,000,000 in NET assets (All Assets including any Real Estate) less your total debt.

*Note Real Estate cannot be included in this NET financial asset calculation

Can i still invest if i'm not an accredited investor ?

Yes, Investors who do not qualify as "Accredited" may still qualify to invest under the "Offering Memorandum (OM)" exemptions. The OM exemptions vary greatly depending on your Province of residence. Below are details by Province, however if it seems overwhelming simply contact us and we would be happy to help you determine your eligibility.

BC, NB, NL - There are no limitation on who can invest or the amount they can invest. However Investors must still be suitable for Viocity REIT as an investment, receive and read through a copy of the Offering Memorandum prior to subscribing, and complete the Viocity Risk Acknowledgement form.

AB, SK, MB, ON, QC, NS, PEI - There are limitation on the amount that can be invested depending on if you qualify as an Eligible Investor. Investor must still be suitable for Viocity REIT as an investment, receive and read through a copy of the Offering Memorandum prior to subscribing, and complete the Viocity Risk Acknowledgement form.

Non Eligible investors* are limited to a maximum investment of $10,000 per year for all OM exemption investments, or must invest more than $150,000

Eligible investors* are limited to a maximum investment of $30,000 per year for all OM exemption investments, or to a maximum investment of $100,000 per year for all OM exemption investments if they receive advice from an Eligible Advisor**, or must invest more than $150,000

*An Eligible Investor can have several different definitions, however the most common criteria used to define an Eligible Investor in Canada as they apply to purchasing Viocity REIT units is as follows:

a.) An individual who's NET income was more than $75,000 in each of the 2 most recent calendar years, and you expect it to be more than $75,000 in the current calendar year.

b.) Your NET income combined with your spouse's NET income was more than $125,000 in each of the 2 most recent calendar years, and you expect it to be more than $125,000 in the current calendar year.

c.) Either alone or with your spouse, you own more than $400,000 in NET assets (All Assets including any Real Estate) less your total debt.

** An Eligible Advisor is generally a portfolio manager, investment dealer, or exempt market dealer who is authorized to give advice with respect to exempt market products and specifically Viocity REIT. In Saskatchewan and Manitoba this may also include certain lawyers and public accountants (with restrictions).

what is the minimum investment amount ?

The minimum amount required to invest in Viocity REIT is $5,000.

Can I invest using my RRSP or TFSA ?

Yes! Viocity REIT is a Registered product and eligible to be invested in through both Registered Retirement Savings Plans (RRSP's) and Tax Free Savings Accounts (TFSA's). However please note that not all banks and credit unions will support your purchasing Exempt Market Products (EMP) and holding them within their organization.

We have partnered with Western Pacific Trust Company (WPTC) to offer a streamlined option to opening RRSP and TFSA's for Viocity REIT. For more information on opening an account with WTPC please refer to the Registered Plan forms available in the Documents section or contact us to discuss further.

How much do viocity reit units cost ? will the price change ?

Viocity REIT units are currently $10.00* per unit.

The unit price of Viocity REIT can fluctuate up or down** based on the Net Asset Value (NAV) of the REIT. The NAV as per the Trust Declaration is required to be updated at minimum once per year. However Viocity REIT and it's Trustees are committed to maintaining an accurate and fair NAV and will evaluate as often as needed and after any major transactions or changes.

A simplified explanation of how NAV is calculated can be explained as follows:The value of all the REIT's assets are added together, this includes fair market value of Real Estate owned, value or mortgages held, and cash.Next all mortgages and liabilities owed are deducted.Lastly the Net Value is divided by the number of outstanding Units held by investors.

A more detailed explanation of how the NAV is calculated can be found in the Offering Memorandum available in the Documents section.

*Unit price is subject to change without notice.** While the Viocity REIT unit price can fluctuate up or down based on the actual value (NAV) of the REIT's holdings, there is no direct outside influence on the Unit price as Viocity REIT is not a publicly traded REIT, which results in very low volatility of our unit price. For more information refer to the FAQ on Public vs. Private REIT's.

how much is the distribution being paid? how often will i be paid?

Viocity REIT's Distribution is currently 7%* and is paid to investors 1/12th on a monthly basis.

For example if you purchased 1,000 Viocity REIT units at $10.00 each for $10,000. Your monthly Distribution would be $58.33**. The calculation is as follows: 7% * $10.00 (Unit Price) * 1,000 (Number of units held) * 1/12 (Monthly Distribution)

*Distribution is subject to change and not guaranteed** Based on taking a 100% cash Distribution, see Distribution Reinvestment Plan FAQ for other options

Do you offer a Distribution reinvestment plan?

Yes, Viocity REIT has a Distribution Reinvestment Plan (DRIP).

This allows investors to choose between having their monthly distribution paid our via Direct Deposit to a Canadian Financial Institution or to have their Distribution go towards purchasing additional Viocity REIT units. Viocity allows for investor to choose between 100% Cash, 100% reinvest or any combination between in 10% increments.

For example you may choose to receive 30% of the distribution in cash and Reinvest 70%. In this scenario of your monthly distribution earned for a given month is $1,000 you would receive $300 (30%) deposited to your bank account and the remaining $700 (70%) would be used to purchase as additional 70* Viocity REIT units.

*Based on a $10.00 per unit price

Can i borrow to invest?

Yes.

Although borrowing money (leveraging) to invest is considered more risky than investing with available funds or cash. If you borrow to invest you are responsible to re-pay the borrowed funds plus any interest charged against them regardless of how your investment may perform. Generally one should only borrow to invest if you are comfortable taking on the added risk, have a stable income, and understand that the distributions and value of your investment may fluctuate.

How do i invest in viocity reit ?

The simplest way to invest with Viocity is to simple contact us by email or phone and setup an appointment to meet with one of our VMI Dealing Representatives. They are happy to meet you in person or discuss details over the phone or online.

In order to invest with us you will need to download and understand the Offering Memorandum and Trust Declaration which can be found in our documents section. You will also need to complete several other documents, our Investor checklist (also available in our documents section) will help to guide you through this process if you prefer to get started on your own.

Please reach out to us at anytime throughout the process, we realize some of the documents are lengthy and can be confusing. We are always here to help and answer any questions you may have, without any obligation for you to invest.

What if i want to sell my units ?

When you are ready to sell and redeem your units in Viocity REIT simply download and complete the Viocity Redemption form found in our documents section. Viocity doesn't charge any fees for selling units and aside from the mandatory minimum holding period for exempt products (4-12 months depending on your province of residence) you are able to sell at anytime. Redemption requests just like Purchase requests and Distributions are all processed on the 15th of the following month.

To ensure we can offer the best returns possible to investors. and don't have excess cash within the REIT. Our Redemption policy as stated in the Offering Memorandum limits the amount to $25,000. per month paid on a pro-rated basis. The trustees at their discretion based on availability of funds can exceed this amount, which has been the practice to date. This restriction is a common one found in Canadian REIT's to protect it's investors by not be forced to sell high performing assets at a bad time. Viocity REIT to date has not had to rely on this clause and has always been able to complete the redemption requests on-time and in the full amounts requested.

Will there be capital growth on my investment ?

Yes. Investing in Viocity REIT is as close as you can get to investing in Real Estate directly, but without the hassles of having to manage your own properties. Over-time the value of Real Estate typically increases and as such capital gains will occur. These capital gains can both increase the distributions the REIT pays and increase the price per unit.

How will distributions be taxed ?

The best answer we can provide to this question is that there are tax implications to investing in a REIT. We strongly recommend you consult your financial advisor or tax consultant in regards to how it will affect your individual scenario.

That said REIT distributions are tax deferred to the extent that is possible. Viocity REIT provides it's investors with a break-down for taxation purposes each year by issuing a T3 form in March. Each form breaks down the individual tax components and makes it simple to plug into your T1 General returns each year. Most of the distribution will be classified as a return of capital which allows investors to defer paying taxes until such time as they decide to redeem their units. In some cases where the REIT sells certain buildings some capital gains may also be distributed to investors, the taxes owing also flow through to investors but are taxed at the preferred capital gains rate. Distributions received also reduce the investors cost base (ACB) which should be tracked and monitored for when you eventually decide to redeem units.

Lastly a reminder Viocity REIT is both RRSP and TFSA eligible. A great way to have your investment growth with less tax implications.

Is viocity listed on a stock exchange ? Will it ever go public ?

No. Viocity is a Private REIT and is not traded on any public exchanges. Viocity REIT is an exempt market product and only available for purchase through exempt market dealers such as Viocity Management Inc. to qualified investors.

At Viocity we believe the Private market is the best place for us and Real Estate investments in general for a few reasons which we hope you will agree with. While there are publicly traded REIT's available on some stock exchanges, they like any other stock are subject to market sentiments, market fears, and the overall high volatility a public market provides. At Viocity our unit price is not set by the supply and demand of investors, as is the case with publicly traded REIT's. Instead our unit price is set based on the actual value of the REIT and the Real Estate and related assets it owns. We feel when investing in Real Estate this is what investor look for and value the added stability a private market offers. Knowing that the next big news event that sends public markets flying up or down will not directly impact the value of the Viocity REIT investment, as in most cases major market news doesn't affect the value of the Canadian Real Estate holdings of Viocity REIT.

We won't promise that we will never go public as with the ever changing security rules it may one day make sense. But we vow to always do what's best for our investors and right now that is to remain a Private REIT.

Why should i invest in a reit instead of my own investment condo or house ?

There are many articles that have been written over the years comparing returns of REIT's to returns an individual investor makes buying an investment property (Google REIT vs. Condo investing). Typically the REIT always wins, and this is for a few reasons. Economies of scale and expertise play a large role. As a REIT investing in entire apartment buildings across the country the expenses we pay are a lot less. For example a typical management fee in Western Canada is 10% of the gross rent, where Viocity is able to secure property manager at less then 4%. We are also able to get preferential rates with many of the trades for basic repair and maintenance of the buildings due to the number of units we manage. Additionally we bring many years of Real Estate investing experience to the table. Finally the simplicity we offer investors vs. the hassle of being your own landlord is immeasurable, if you don't believe us ask your landlord friend for their best horror stories :)

Are you registered with any securities regulators ?

Yes. Viocity Management Inc. is registered with the BC, AB, SK & MB securities commissions as an exempt market dealer. We are also registered with the Ombudsman for banking services and investments.

We are currently also persuing registration with the other security commissions in Canada as an exempt market dealer in early 2017.

What level of reporting and disclosure does viocity provide ?

Viocity REIT does it's best to mimic the best reporting practices of publicly traded REIT's in Canada to remain as transparent as possible to our investors. Our offering memorandum, trust declaration as well as current financial reporting can all be found in our online documents section. Viocity REIT provides quarterly un-audited financial statements to its investors as well as an audited year-end financial report at our annual general meeting (AGM).